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tv   Power Lunch  CNBC  December 5, 2012 1:00pm-2:00pm EST

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on your holiday shopping from l.l. bean. final trades around the horn. >> starting off facebook. >> hk. >> dell. >> i like emerging markets. dvy dvye. scott, thank you very much. this is new video from washington. members only. membership has its privileges. we're 26 days away from going over the fis calf cliff and these are members of the house of representatives walking out. they're going home. no session tomorrow, long weekend. they need a rest. i hope someone can explain this to me. the bears taking a big bite out of apple computer today. the stock getting hammered. has apple lost its mojo or does
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the company still have room to run? and city, the big slash. knife coming down on 1,000 jobs. the cfo is set to speak about the shake-up right now and we will have the very latest on this very widely held stock which has been moving higher tod today. we have a rally on our hands despite some downward pressure in apple. two of the biggest names in the most widely held stocks around, citi and apple topping the news this hour. headlines aren't good. apple right now is down about 4%. back in bear market territory, down 22% from their historic intraday high of $705 set back in september. right now shares are trading at $551.33. bob pisani joins me on the floor of the nyse. it started with this idc report citing the fact that they would lose their dominance in the tablet market in probably the next couple of years, and then the margin requirement story.
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>> it is a little complicated. i just want to address this issue first of the rally that we've got because i think that is sort of what's moving the overall market. there is some vague talk in washington that there may be some republican members starting to break ranks with the leadership on the tax issue. there's talk now that some republicans might be willing to accept higher taxes for the wealthy. this would be a break-through. we're monitoring that. now to what sue was talking about on apple. there are some firms raising margin requirements. i think the main catalyst today was an at&t investor conference where executives of at&t gave sales figures for smartphones for the first two months of the quarter that basically implied sales will be flat for the quarter compared to the same period last year. this includes smartphones, samsung as well as the iphone. the concern is that iphone sales might disappoint a little bit here. ipad shares may be on the weak side of the tablet market.
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citigroup laying off 1,000 people and the financials are the bright spot of the day. very depressing story, frankly. >> it is at this time year to lose that many jobs. thank you, bob pisani. we'll cover apple in-depth later in the hour. it is worth taking another look at citi. trading up almost 6.5% at $36.49. the banking giant slashing 11,000 jobs, taking up to $1 billion in charges. the chief financial officer is speaking right now and kayla tausche is listening in to that conference call. >> city's cfo is just ending his prepared remarks right now at the goldman sachs financial services conference but he mentioned those layoffs right out of the gate. addressing the morning's announcement which he said is straight to the heart of citi's mission which is getting back to the basics of individual banking. among those 11,000 job cuts though, more than half will take place in the consumer banking business abroad. the bank will exit regions like
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pakistan and paraguay that haven't been profitable. 1,900 jobs will come from its institutional client's group. they'll start to reassess coverage of certain sectors and geographies in that group. it will close offices underutilized, revisit its branch strategy in metro areas including those in the u.s. this is a broad overhaul of strategy. we have some 350 of those layoffs, too, taking place in citi's so-called bad bank citi holdings. the cfo said the bank will move swiftly to sell those assets but they still face two problems -- valuation of businesses and financing for these buyers that are interested. the financing caused them to remain directly exposed to a lot of the bat businesses like mortgages. they're trying to get out of them as quickly as possible but we expect they'll face further write-down wlz they do that. that's a big strategy for this year as well. >> kayla, thank you. let's talk more about this
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with editor in chief at american banker. the new ceo is taking a broad brush approach to this. he's moved quickly and guys on the floor who trade this stock are giving him some high marks because he's making some decisive moves. are they the right moves? >> i think they are. citi has gone in this direction already but i think they're trying to show they're speeding things up here. on the scale of citi group, it is not a big move, up 4%. we're not cheering because anyone's losing a job but in terms of managing this huge globe spanning bank, he has to go down this road. he's getting pressure from individual investors to speed things up. >> neil, we'll talk more about this later as well. we're up 125 points on the dow jones industrial average and a lot of it has to do with what's going on in washington right now. >> it is really very, very interesting, sue. the reason the s&p is relatively
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quiet there is that other stock we're going to talk about, that would be apple. to washington now. the soap opera we call the fiscal cliff. before we get to our chief washington john harwood and the president is meeting with another grouch ceos, i need to start with eamon javers on capitol hill where lawmakers are skipping down early for a long weekend. eamon, wasn't thanksgiving just a couple weeks ago? >> it was. let me check michael ichaey cal. you see rank and file members of congress leaving the capitol. they are done for the week. they're headed back loam to their hometown districts. a lot of folks focused on this negotiation right now but the reality is that the negotiations are taking place among just a very few, very high level people. i was talking to a few rank and file members yesterday who said they were frustrated there is not a whole lot for them to do, they are just sitting around here waiting for some break-through in these negotiations. they want something to do on the
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floor, in their offices and there is not much for them to sink their teeth into. now they're going into their district. leadership is going to stay here and continue these negotiations. speaking of wasting, speaker of the house john boehner came out earlier today to say he's waiting, too, on a response from the white house to his proposal. take a listen. >> we need a response from the white house. we can't sit here and negotiate with ourselves. our targets and framework are things that we can all agree on and it's exactly how we approached our discussions in the biden group, my discussions at the white house a year-and-a-half ago, and, for that matter, in the joint select committee. >> one interesting note here is how much businesses and ceos have become the political football here. i'm told that yesterday congressman kevin mccarthy, the republican majority whip, was on a conference call with ceos and he urged them to get involved and tell the white house in all their frequent communications with the white house that they need to tell the white house to start talking to house republicans.
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so ceos in the business community right in the middle of this negotiation. >> eamon javers, thank you. john harwood has the latest on mr. obama's big meeting with some of those ceos. john? >> the other way the ceos are in the middle of this is the president appeared before the business roundtable today as part of his effort to continue rounding up support from various constituencies for what he calls a balanced approach. one of the things he pressed was a priority that the head of the business roundtable, john eng r engler, has suggested which is a longer term fix to the debt ceiling problem. remember that it was a catastrophic standoff in mid 2011 that caused the downgrade in u.s. credit. president said he's simply not going to negotiate in the negotiating process that results in the same kind of stand-off. here is the president. >> if congress in any way suggests that they're going to tie negotiations to debt ceiling votes and take us to the brink of default once again as part of
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a budget negotiation? which, by the way, we have never done in our history until we did it last year. i will not play that game because we've got to break that habit before it starts. >> so what you see reflected in that statement, tyler, is the president's feeling that he's got the upper hand having won the election and also that many in the financial community, the business community, are very sympathetic to the argument that he was making just on that point on the debt limit. >> john harwood, thank you very much. with lawmakers now leaving capitol hill to start a long weekend, what's the likelihood that a divided congress can get a deal on the fiscal cliff before we hit it. represents tim walls is a democrat from minnesota who filed a petition yesterday to force a vote on extending tax cuts for the middle class. congressman, good to have you with us. >> thanks for having me. >> i have to say that the optic beioptics
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of congressman leaving the capitol right now for another long weekend is extraordinary poor. it is disappointing and to many it is outraging. what do you say? >> i think it is outrageous. i couldn't agree with you more on that. these are good folks. each one of us was elected to represent 650,000 people. i heard it -- i think everyone of the other floor members heard it -- they're tired of the bickering, they're tired of the cliff talk. they want to us compromise and get something done. i proposed yesterday let's find the xron ground. we all agree that tax rates should not go up on folks make makeing $250,000 or less. a family. >> when congress goes home today for a long weekend, who pays for the travel? >> the taxpayers pay for it. they just flew us out on monday. we took two votes. we didn't vote until 6:30 the other night. not holding hearings or moving things forward. i think there is value in the public hearing this discussion. i'm one of those who say, yes,
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this has to be a balanced approach. tell me what you want for us to do but i don't like the idea that i was elected and my election certificate is as valid as anybody else's here not to have a say in this. i'd say to my colleagues, lets us, the people's house, take back control of this argument, come together and put something forward. >> you and others have signed on to a so-called discharge petition that would cause the house of representatives to take a vote on the bill passed in the senate some time ago that would extend the so-called bush era tax cuts for people earning less than $250,000. it requires 218 signatures. that means you've got to get some republicans to sign on. do you have any indication that any people will break from speaker boehner and sign your petition? >> i think so. i know one for example, my friend walter jones down in north carolina, said that he's open to it. i think i need 41 people now. we've got 177. i need 41 people to come forward and i think what's really interesting about this is,
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republicans aren't violating any pledge on this. they are assuring taxes don't go up. i see no reason why we can't move this forward. we all know that these tax cuts will be extended for this group, certainly. now if you think the top 2% should be extended, let's have that debate but we can't agree on that. and so i think it is horrible that people are filing out of the capitol, they're going to go home. my point on this discharge petition is go look those people in the eye and tell them they don't want -- i want the big deal. i want to be very clear about that. i want the big deal. the $4 trillion in cuts, simpson-bowles type plan. i'm going to be one of those guys. but in the absence of that, let's give people some certainty at christmas, let's give the markets that you're talking about some certainty to know that this is done. >> i think you would have a lot of company amongst taxpayers who are as outraged as you seem to be that congress, 435 members of the house, are going home at the taxpayers' expense on this day with the fiscal cliff not resolved in any meaningful way.
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congressman walz, thank you very much. >> yeah, i really appreciate it. shares of freeport mcmoran the worst performer on the s&p. shares moving lower here. after the conference call hard-edged questions coming from one of its major shareholders. cio blackrock's natural resources team abby hambrook saying they should put this issue to shareholders an they feel like they have broken investors' trust by diversifying into energy with these $9 billion deals. back to you, sue. we are just off the highs of the day, up 130 points. we'll continue to follow the markets for you. plus, emergency landings and inspections by regulators. growing pains for boeing's new dreamliner. plus, netflix's deal with disney. is it really a game changer? phil lebeau and julia boorstin all over those big stories. phil, you first. >> sue, right now as we speak a technical team from boeing is in new orleans looking at that
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dreamliner after the emergency landing. we'll have the latest in just a bit. but first out to julia in los angeles. >> netflix says the company is taking a big step forward. we'll tell you how and how much it is worth after the break. he loves risk. but whether he's climbing everest, scuba diving the great barrier reef with sharks, or jumping into the market, he goes with people he trusts, which is why he trades with a company that doesn't nickel and dime him with hidden fees. so he can worry about other things, like what the market is doing and being ready, no matter what happens, which isn't rocket science. it's just common sense, from td ameritrade. which isn't rocket science. i have obligations. cute tobligations, but obligations.g. i need to rethink the core of my portfolio. what i really need is sleep. introducing the ishares core, building blocks for the heart of your portfolio. find out why 9 out of 10 large professional investors choose ishares for their etfs.
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we're keeping an eye on dow component boeing. right now the stock is up 23 cents, .33%. one of its new dreamliner jets making an emergency landing. regulators are order rg the entire fleet of 787s to be
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inspected for fuel line issues. some teething problems perhaps or is this something more serious for the company? our phil lebeau is taking flight for us today in chicago. >> most people i've talked with in the industry believe this is more a case of teething problems as boeing continues to ramp up production for the new dreamliner. let's talk first about the emergency landing in new orleans. it happened yesterday morning. they made an emergency landing after the pilots reported a mechanical problem on the plane. this boeing 787, by the way, was delivered to united just two weeks ago. it is relatively new to service. there is a technical team in new orleans working with united. we should be getting an update some time today in terms of what they found. meanwhile, the boeing dream liners are all undergoing an inspection. we expect the faa to issue a requirement on fuel line checks today. boeing has already asked all of those in service to be checked. checking for two connectors. half the dream liners that are already in service have been inspected. when you are looking at how many dream liners are out there, you
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are looking at fewer than 40 worldwide, three here in the u.s. with united. the dreamliner is built now both in everett, washington as well as charleston, south carolina. at the end of the day this is what we are talking about whether it comes to the ramp up in deliveries. last december was the first delivery after dreamliner. five per month is where they are at right now. they need to get to ten per month which is where they believe they will by december of next year. dreamliner is the key to next six, seven years of profitability. tyler and sue, a lot of people are watching what's happening in new orleans today as well as some of these other issues with the dreamliner very carefully. >> the market seems to be voting in their favor because the stock is up better than .33%. phil, thank you. pandora also a big stock to watch today. shares of the online music service getting crushed. right now down 18.33% at $7.71. after the company cut its outlook. "street signs" will have more on pandora's future coming up. it is a story we broke right
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here on "power lunch" yesterday. disney and netflix in a content streaming deal. netflix's shares backing off from yesterday's big pop. this will and game changer or not? julia boorstin has a closer look for us. >> speaking today at the ubs media conference, netflix's chief content officer called the deal a game changer as it enters the same distribution window as premium cable channels like hbo and showtime. he reiterated that netflix has no plans to raise its prices in light of this new content. he says the goal is to have the best curated exclusive content and not try to secure all the content out there, and that it is better to have fewer high-quality options. he added netflix will invest more in producing its own original shows and will never sell advertising. there was no comment on how much netflix is actually paying disney but sources tell me it is definitely more than disney brought in from starz which is estimated at $225 million.
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disney's cfo also spoke at the ubs conference saying the disney evaluated a number of factors and that netflix was the "highest value creator for disney and its family friendly films" so what's next for starz now that it is losing disney's exclusive content? liberty media does plan to spin off starz early next year. then the "wall street journal" stars it will begin conversation with potential buyers. lirt a liberty and starz tell me they have no content. >> julia, thank you very much. there are 7.1 billion people on the planet. but only 71 of them -- that's .000100001 have real power. who they are and how they influence your investments coming up. plus, apple drops. stock back in bear market territory facebook getting
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liked. citi cutting thousands of jobs. what traders make of these stock moving headlines. back after this. i always wait until the last minute. can i still ship a gift in time for christmas? yeah, sure you can. great. where's your gift? uh... whew.
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of its best levels of the day. ty? >> sue, thank you very much. today we're doing "analyze this" a little differently. we're going to analyze the headlines. why? because we can do what we want to right here. jim iuorio, director of tjm institutional services joins me now. talk about apple. research firm idc says apple will lose some tablet share. in addition, core clearing in margin requirements from and toll 60. then there is a death cross of some thing -- >> don't put too much weight in it. idc said they'd lose this much market share in the tablet market which is exploding. i don't think it is a big deal. the apple story begins and ends with people taking capital gains taxes before they could potentially go up. what stock has had more loyal people in it longer and acued more potential as capital gains than andle? almost none in my opinion. that's what it is. a margin requirement change?
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that's a derivative. >> you think it is not a fundamental business issue, it is a technical tax issue. >> amen, brother. >> citigroup going to cut 11,000 jobs, 4% of its workforce. shares of the bank right now moving higher there by 6%. what do you think of citi? >> the market likes someone who's willing to admit they had a bad trade and stop out of it. citigroup is moving out of places like romania, paraguay, uruguay, but what they're saying is that we can't make money there anymore, we'll contrait on places we can make money. >> the romainian operations wer cutting them! facebook seven months after going public, where do you stand? >> this thing gives a little bit of credibility. facebook is a concept. the market won't bother itself with making money or a credible plan to make money. they'll give it a grace period for a while just on the concept. this scattered showers a little bit of credibility. i like it. >> this is a classic lesson it is not what you buy but when you
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buy. if you bought it at $18, you'd be up 50%. >> rise above. facebook joining the 100 of nasdaq. what do you think? go to finance.yahoo.com. results will come up. like it? unfriend it? it's complicated. results later in the show. labor groups protesting outside of 100 social security offices around the country today telling lawmakers do not touch social security. keep it out of the fiscal cliff stuff. do we raise the retirement age to ease our debt? treasury secretary tim geithner will speak later to steve leisman about the fiscal cliff talks. we'll have a preview and discuss what traders want to hear. wooohooo....hahaahahaha!
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goldman sachs earlier today cutting its outlook for gold and prices are closing right now. we have about a $2 loss in the gold market. sharon epperson is track being the action down at the nymex. sharon? >> gold prices are finishing the day basically flat here, sue. we're right around $1,693 an ounce. keep in mind, gold prices have lost about $50 in the last week or so and goldman sachs today saying that they are lowering their three, six and 112-month
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forecasts on gold. they say $1,825 is down from the $1,840 level were expecting. for 2013 they look for the arch price to be $1,810. freeport mcmoran, $9 million deal to diversify into energy, the world's largest copper producer, still a lot of interest in copper. they say their opinion on copper has not changed. retail investors looking to buy copper, buy gold as well. of course freeport is one of the world's largest producers of gold. they're doing it through the exchange traded products. the jjc for copper and gld for gold. copper prices nearly coming in to where gold prices are the last month or so as gold prices and gold holdings are at record levels. back to you. >> thank you very much, sharon. let's get the trading action here. bob pisani is back with me. we were up 131 points. some news flashes out of
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washington about possible sequestration spending cuts from the omb. basically took the market off ifts best levels. held hostage again. >> we've got to get some action. if we don't see action we'll threaten sequestration. we did move up earlier in the day. there were very vague rumors that some republicans might be willing to break ranks and accept taxes for the wealthy, higher taxes for the wealthy. that of course a major sticking point in the negotiations. that moved the dow up earlier but we don't have anything specific right now. these are all still rumors. apple, just a lot of things going on today. i believe there was an at&t investor conference where one of the executives at at&t gave sales figures for the smartphone sales for the first two months of the quarter saying sales would be flat implying they'd be flat from the same period last year. smartphones, which include overall smartphone sales like samsung and iphone sales. but i think some were a little disappointed to hear that, were
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hopeful it might be stronger. there are also concerns the ipad share of the tablet market might be slipping. and of course some firms raising margin requirements as well. the leadership group here, our banks, a lot of analysts got what they wanted, citigroup cutting jobs, 11,000 jobs. cutting expenses. what a sad reason for the market and financials to be up today on that kind of headline over christmas. >> i think it is also the new ceo after a very little amount of time being at the post had to do it and he did the decisive action, as unpleasant as it is. that's encouraging to investors who have basically been in that stock many of them for a long time and have seen their entire investment wiped out. >> try explaining to main street why wall street thinks this is good news. >> i know. especially at this time of year. thank you, bob. over to the nasdaq now where apple is the big story that's weighing on that index today. seema mody is there to give us a bit of pit on that. is there absolutely.
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hi. apple is the big story in tech, shares back in bear market territory. just when we thought the stock may have bottomed, a lot of technicians talking about this death cross which is a bearish signal. shares of apple right now the worst performing stock on the nasdaq 100 and the s&p tech index. elsewhere we're seeing chips under pressure after altera, a chipmaker, lowered its q4 revenue outlook. stock downgraded to hold mentioning higher inventory risks and an expectation of rising operating expenses in 2013. that perhaps weighing on the broader semiconductor space. lastly, a quick check on social media stocks, pandora shares underperforming after projecting slower revenue growth. >> thank you, seema. to the bond market. rick santelli is at the cme pits in chicago. i know they're watching washington as closely as wall street is here, ricky. >> you don't want to watch too
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closely. sometimes too close, you see too much. if you look at an intraday chart though you see pretty much all you need to see. rates briefly were around 1.57. now why is that level important? opening the chart up to mid-november, it was the last time we closed under a 1.58 yield. hovering here we're close to three-week low yields. if you open it up to the end of august, you see what's going on here. should we drop just another basis point where we were and close there on a closing basis, that three-week low yield would turn to a three-month low yield. remember we've had 21 days in a row where the closing yield has been between a 1.58 and 1.69 yield. to get outside of that, november 6, the election, we had a 1.75 yield close. if we look towards spain and their 10-year, there isn't a lot to see on this intraday chart except for we've heard a lot about buy-backs and how great it is. today we had a public auction and they didn't show up for the entire amount. a dozen basis points isn't huge
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and these levels around 5.40 are a lot lower than they've been but this is something to pay attention to. super storm sandy and anxiety over the fiscal cliff affecting job growth. adp showing the private sector created 115,000 positions last month. the expectation was about 125,000. it comes ahead of friday's key employment report and to talk about that and more, our senior economics reporter steve leisman joins us from washington. steve, we'll talk about your interview with secretary geithner in a moment but let's talk about those economic numbers. what about today's, what about friday's? >> before i get to the adp number, i have new information i've been able to report on the way down here from new york. that is, be prepared on friday for potentially, especially in the household survey that creates the unemployment number. be prepared for potentially big sandy effects. let me tell you why. we had an early thanksgiving this year. 11/22. the 22nd of the month.
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what happens on those kind of years is that the bls moves back the survey week from the 12th which is the normal survey week in this case, to the 5th. what was the fifth? it was the week that really the worst effects of sandy in terms of people not reporting to work or maybe even to find work hit. so there could be bigger numbers that were out there than perhaps people expect. 118,000 was the number on the adb. mark zandi from moody's calculates the number. he says 86,000. it may have been reduced by 86,000 because of hurricane sandy. but there was a good number today which was the ism data when it comes to the services sector. you can see it was up. there's the adp data. but i want to talk about the services sector which was up a bit more than expected. then what you had, business activity was up, new orders were up, employment was the one thing that was down. i don't know if that's a sandy effect. that could be also, by the way, a fiscal cliff effect.
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zplint vi >> interviewing secretary geithner later today. what's your first question going to be? >> i want to get his response -- we had the president respond to boehner's proposal but i want to get the secretary's response, too, the specific issue of, hey, the republicans looked like they made a step forward, actually got some accolades in some of the press for agreeing to new revenues. where's the administration's response on that side? are they willing to give? i think that's a key question right now in terms of what the news flow is right now but also there's critical questions about the dollars on both sides of the equation, tyler. >> steve leisman, thank you very much. jim iuorio, i want to ask you the same question i just asked steve. if you were talking to secretary geithner at 4:00 p.m. today as steve will be, what would your first question to him be? >> my questions would be about dividends and capital gains as they're market related. with the dividends we've seen a tremendous amount of companies bring them forward in the name of tax avoidance.
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in both france and england we've seen a tremendous amount of steps taken for tax avoidance when they hire -- >> people leave. >> my only question, there have been studies done on that in the united states to figure out what the effect would be. my second question would be, back in '08 when the president was debating hillary clinton accepted the concept that every time we've raised capital gains tax, the receipts from that have gone down. every time we've lowered it, they've gone up. he accepted that. i want to know if his opinion is modified or is he considering laying off tax and business investment for fear that it will give us less of it. >> two very interesting questions there about what effect a change in taxes does to behavior. i think you can't deny the fact that it does change behavior. is there right. it is very complicated math. when they start saying it is math, it is really complicated math. you show me someone who can do that study -- >> it goes back to that idea, you raise a tax on something, you'll get less of it! >> no doubt about it. >> jim iuorio, thank you. reminder -- do not miss steve leisman's exclusive interview with treasury
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secretary tim geithner. there won't be many more of these because mr. geithner has signaled he will be leaving. it is at 4:00 p.m. today eastern time. key man, the point man, on the administration side in the fiscal cliff negotiations. bertha coombs has a "market flash." >> disney's cfo speaking at a ubs media conference saying that e es espn ad revenues slightly ahead of last year, very much a powerhouse when it comes to revenues for disney which this year is the third biggest gainer on the dow jones industrial average. a question for you -- what do the pope, mark zuckerberg and angela merkel all have in common? they are among the voices that matter the most. we'll tell you why coming up in a few moments. a check of the dow jones industrial average, we are off of our best levels of the day but considering the weight that apple is putting on the nasdaq, a lot of people thought that the dow would be negative. we're up 115 points on the trading session and we are above
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tdd# 1-800-345-2550 call 1-877-656-8765 tdd# 1-800-345-2550 and open an account, tdd# 1-800-345-2550 now with no trade minimums. facebook is joining the nasdaq 100 next week seven months after going public. we asked you what you think about that. 15% say like it's turned its corner and it is making smart moves. 69% say unfriend. staying away. still not convinced. and 16% say it's complicated. let's see what's coming up on "street signs," which is never complicated and always must-see viewing. >> as they say , it is very eas. we're going to talk about the fiscal cliff. if we go over it, will it really destroy the u.s. economy? we'll show you some stats to make you go -- hmm. we'll talk more about apple's slide, should microsoft's ceo steve ballmer get the boot if
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the surface fails. and we will introduce to you quite possibly the world's dumbest demolition crew. it involves a multi-million dollar bore chateau and really bad bulldozing. >> yikes. see you at 1:00, brian. thank you. listen up wall street recruiters, a recent rash of college cheating scandals has shown academic dishonesty is unfortunately a very big problem on campus today. who are the worst offenders? tonight's premier of "faking the grade -- classroom cheaters," we'll tell you. they'll find out which students are most likely to cut corners in the battle to gain an edge. >> reporter: don mccabe and his canadian colleague collaborate on research. mccabe says in the u.s. business students cheat the most. engineering students are often near the top of the list. and so are communications and journalism students. women studied at one university
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said they don't cheat when they're in a women-only class. but when it's a coed group, they say everything changes. >> they said, well, whether we take courses with just the women, we don't cheat but when we do with the men we do because we know that's what they're doing and we feel the need to cheat to compete. >> don't miss the premier of "faking the grade -- classroom cheaters," tonight at 9:00 p.m. eastern time only on cnbc. pretty disturbing, ty. >> absolutely. forbes just out with its 2012 ranking of the world's most powerful people. 7 billion people on the planet but only 71 with enough swag to make the cut. here's the top ten led by the second-year running, president barack obama. the highest ranking female, angela merkel. then mr. putin of russia. bill gates, pope benedict, ben bernanke, saudi king.
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more on how the list was assembled and other details, forbes media ceo, mike, thanks for being with us. >> this is important to us because nothing personifies what we do at forbes like our power list. we're about success and the impact of people who achieve success have. we have ten editors who get together. we draw on a huge bank -- >> they always agree on everything. don't they? >> exactly. there is some subjectivity, i must admit. they talk about the number of people that someone influences. the amount of financial resources that they have. how many spheres they operate in, are they just financial or are tle political or philanthropic. the fourth criteria is do they act on their power, do they use their power. and if you look at -- >> that's the reason why bill gates would rank so high here is how he has used some of his financial power in the philanthropic sphere. it was interesting to me,
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"forbes" magazine, leading business magazine, most storied one maybe of all -- >> i have no argument with that. >> and yet, no businessman in the top ten. highest ranking businessman, number 11, carlos slim of mexico. highest ranking u.s. businessman was warren buffett. i believe the third businessman in the list -- we have the third one there? i forget who it was -- oh, mike duke of walmart. >> sure. well, it's interesting. if you look at the criteria we've chosen and the people in that top ten, it's hard to argue with the leader of the free world who just won the electoral college, the popular vote and those seven states that we talked about? he won all seven of them. it is hard to argue that he isn't the most powerful man. as you go down through the list, angela merkel. she's a politician, not a business person but she's certainly got a business responsibility. she's carrying the weight of the eu on her shoulders in a very real way.
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>> as we move -- so basically political power and influence over people and economies trumps the individual leaders of companies. >> particularly that last piece because the economies are so important. and fortunes -- >> i was curious as i looked through the list of other politicians that the sort of second ranking american politician -- if i'm looking at the list correctly -- was michael bloomberg. i guess that's because you say he's influence in business, he's influence in philanthropy and he is politically powerful. bill clinton, number 50. no hillary clinton or not list. way down at number 65, below the colombian drug deale erdealer, . boehner. boehner that low? >> it's remarkable. there is some subjectivity that goes with this but i think that's very interesting. the other folks that you mentioned. bloomberg fascinates me. >> bloomberg more power than
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bainer? really? >> i don't know about more power but think about the interesting position that bloomberg's in. he's got a year left on this third term that he has figured out a way to have. he's a publisher. he's a 15th richest guy -- most powerful guy on our list, one of the richest men in the world. >> and a quick thought on ilan musk -- we've heard his name but he doesn't get a lot of attention. why is he in the top 70? >> when you think about the entrepreneurial ethos that forbes tries to represent, the people, places and companies that we try to describe an entrepreneurs in particular, here's a guy who founded paypal. here's a guy who's at the front of the tesla automobile. he's now moving cargo through space. filling the void that nasa has left. >> it's like watch what he does zblep's going to be the railroad magnate, early railroad magnate in another period of time. >> good luck with the issue. >> thanks very much.
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i know you love coffee, ty. so listen up -- the countdown to christmas is just 19 days away an starbucks has the perfect stocking stuffer. they are launching a $450 gift card. it's made of steel. is the limited edition luxury item worth its weight or is it just a sign of status? shares of starbucks trading lower right now by almost a full percent. we'll talk about that story coming up in just a few minutes. as we head out to a quick break we are losing our strength on the dow jones industrial average. we're now only up 100 points. we were up 130. here's a look at the biggest winners on the nyse with freeport mcmoran exploration on the up side. ♪ [ male announcer ] 'tis the season to discover the kid in all of us. enjoy free shipping and great values on your holiday shopping from l.l. bean.
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welcome back to "power lunch." financials strong today. in fact the banking index today at the highs of the session and they are led by stocks like bank of america. today it hits a new 52-week high. the best performer in the dow jones industrial average all year. time for the power rundown. i'm joined by bob pisani and
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american bankers neal weinberg. apple getting hit very hard, down more than 5%. session lows this afternoon. worst day of the year. basically there is a have right of things that are floating around out there about why the stock is down. what's your take? >> my take is that this had to happen some day. whether this is the big hit or not, i don't know. as i've said for many years and heard other people say, trees don't grow to the sky. investors talk about apple as if this there no end to this stock. clearly there will be an end to this stock. i tell people sony used to be apple. >> that's true. >> there's vague concerns that iphone sales may not be as strong this quarter, there's vague concerns that ipad sales, the percentage of tablets may not be as strong. all i know sim's eligible for an upgrade to the iphone 5 just this weekend and i'm getting one next weekend. i's an ipad, iphone fan. another option on the fiscal cliff negotiating table being considered is raising the age
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when seniors can start receiving medicare to help ease our debt burden. what do you think, bob pisani? raise the age. is it a good idea? >> of course it is going to help us. we should consider that. that's the most likely thing on the cable. what i'm worried about here, it is very easy to say we'll save a bunch of money, pick a number, $6 billion or whatever the number if we take it off. where do the people go? those 65 to 67-year-olds will go into the private system where these exchanges we're going to have. they're likely going to pay more money there and the premiums are going to go up because of all those seniors. so it isn't free! that's my point. it is not just the government saves money, other people, those seniors are going to pay to be in those exchanges. >> there's no free lunch. >> nothing. >> i think there is good news that with this administration we don't have to worry about having another debate about privatizing social security. you and i, bob, are probably not going to get social security at 65 anyway because that age is already going up. this is not a big problem for our economy. medicaid and medicare are much
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bigger problems. we can raise it or also increase the tax on people who make over $106,000. >> listen be, coffee lovers. try not to choke on that peppermint mocha latte. we'll tell you about that new $450 starbucks gift card, entirely made of steel. someone down here said it probably should be made of gold given that price. would you ever consider giving that as a gift or buying something like that? >> i've paid up for premium services, v.i.p. tickets at conferences -- concerts. there's a market for v.i.p. services. remember the platinum card? 10 or 12 years ago, platinum card wasn't good enough for the world. american express introduced the black card. that was the thing to have. you needed a high net worth. that thing is still out there. there is always a market for these kinds of services. >> but in this economy, a $450 gift card. >> i bad a bunch paid a stupid f money to see the rolling stones. my wife laughed at me but i love the rolling stones so i'm willing to pay a bunch.
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fine. >> my thing with this card is you can get free refills. they need an express line like walt disney has. something i really care about, my time. that would be much better. course some people think that it is not starbucks, it is charbucks so you need a coffee that's a little lighter. >> i'd pay to get a cut in the line but that's not what you're getting. you're getting discounts though and some free upgrades occasionally. >> we'll see whether it flies. maybe it be in your stocking this christmas. coming up in the next hour -- where in the world is john mcafee? the latest on the location of the eccentric software mogul coming up on "street signs." from 17 billion chips worldwide to a world of super-connected intelligence. the potential of freescale unlocked. nyse euronext. unlocking the world's potential.
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